It’s the End of the World as We Know It This past week in the markets was historic – for all the wrong reasons. It reminded me of the words from a popular R.E.M. song during my varsity days, which I’ve borrowed as the title of this article. The now-familiar word “tariff” has caused markets…
Market Corrections Reveal Who You Are as an Investor Market corrections don’t just test portfolios; they test people. In a bull market, everyone feels like a disciplined, long-term investor. Confidence is high, portfolios are growing, and the temptation to believe in one’s own investing skill is strong. But when the market corrects and prices fall,…
Decisions vs. Choices: Understanding the Difference I recently learned that a choice is not the same as a decision. When it comes to personal financial planning, the words “choices” and “decisions” are often used interchangeably. However, they represent distinct concepts that play different roles in shaping your financial future. Recognizing the difference can help you…
The Futility of Predictions: Why We Obsess Over Market Forecasts That Always Fail Every December, as the year winds down, financial analysts and market pundits flood the media with bold predictions for the year ahead. Investors eagerly consume these forecasts, as though they provide actionable insights. Yet, year after year, these predictions miss the mark—often…
Beware Prevailing Investor Sentiment and Consensus The CNN Business website offers a “Fear and Greed Index,” which tracks the prevailing emotions in the market. At present, the market sentiment falls within the “Greed zone.” However, if we zoom out and assess how this sentiment has fluctuated over the past 12 months, it becomes clear that…
How the “Flaw of Averages” Distorts Investor Decision-Making When Planning for Future Goals Consider the case of the statistician who drowns while wading through a river that he calculated to be, on average, three feet deep. If he were alive to tell the tale, he would warn that plans based on assumptions about average conditions…
Reasonable Expectations for Equity Investing Hendrik Bessembinder, a professor at Arizona State University and the author of the groundbreaking paper “Do Stocks Outperform Treasury Bills?” provides key insights into the realities of stock market investing and lifetime wealth creation through the markets. Bessembinder evaluated the lifetime returns of every U.S. common stock traded on the…
Retirement Planning: Beyond Numbers, Embracing Life’s Choices We view retirement planning through a financial lens trying to calculate that “magic number” that will sustain a comfortable lifestyle. Our minds gravitate towards numbers and financial preparedness. We focus on savings targets, investment returns, and withdrawal rates, calculating how much we need to retire comfortably. In this…
Beware the Headlines In a recent article, Dimensional Fund Advisors highlighted a couple of common investing mistakes. One of these is falling in love with popular stocks based on their recent performance or media attention. Their research, however, shows that it is better to buy the Top 10 companies in the US before they reach…
The Economics of Time and Money: Understanding the Value Exchange Think of all the things that you spend your money on – objects and experiences. Do you ever stop to consider if it is worth it? Sometimes it is and sometimes it’s not. If you are not limited by money, you will be limited by…